Trusts: central considerations and one sadly instructive tale

Trusts — which go by various names and are instrumental planning vehicles across a broad spectrum of concerns for millions of individuals and families across the country — are among the most versatile and flexible tools in all of estate administration.

A trust can help planners avoid probate. It can also ensure that the needs of an elder loved one or younger family member with special needs are taken care of, allocate funds to beneficiaries in certain amounts and at certain times of their lives, endow charities, avoid taxes and promote a host of other objectives.

A word of cautionary advice to our readers in California and elsewhere, though: Trusts can be complex and, given that they centrally involve the control and distribution of money and/or other assets, all persons and entities with a stake in the establishment of a trust and its material details should optimally be timely advised of the particulars.

That is, a trust that is well communicated and understood — and that sometimes means fully discussed and vetted among all interested parties — can far more often achieve its aims than can a trust vehicle containing provisions that come as a rude shock and create conflict within families,

Sadly, a tragic tale that unfolded earlier this month in Indiana underscores the dire consequences that can visit a family involved in a trust dispute. Police in that state report that a young woman and her son, a toddler, were killed by her paternal uncle over a long-simmering family argument involving a trust worth millions of dollars.

Of course, the story is singular and certainly an anomaly in the realm of estate planning, but it does serve to point out the need for any planner to think about family expectations and related factors when attending to estate administration concerns.